Sacramento Home Prices Top Out

A market top in home prices in Sacramento?:

Price appreciation for new homes in the Sacramento area has slowed to a crawl, with more builders tempering or skipping price increases and offering greater incentives to attract buyers.

The median price of a new home sold in the capital region was $459,990 in the third quarter, unchanged from the previous quarter and up 3.4 percent from one year ago, according to the Gregory Group, a Folsom-based market research firm.

For the same July-September period last year, the new home median shot up 23 percent for Sacramento, Placer, El Dorado, Yolo, Yuba and Sutter counties.

"In general the market is responding like it should, based on what's happened with price increases the last couple of years," said analyst Greg Paquin, who heads the Gregory Group. "If we kept going at the same (appreciation) rate we would have been in trouble. We couldn't have sustained it, and we would have fallen off the proverbial cliff."

Sales incentives and a surge in lower-priced condos and homes on small lots helped push overall third-quarter sales up 4.5 percent, but sales so far this year are down 7.5 percent.

There nothing like higher prices to cure high prices.Read the whole article.